Impact of Non-economic Factors on the Development of the Apparel Sector in Sri Lanka

Abstract

The Sri Lankan apparel industry has transformed itself into a high-end value chain manufacturer within a short period of time. This study explored the influence of non-economic factors on productivity, competitive and comparative advantages as the influencing factors on the development of the sector. A thematic assessment of nine leading apparel exporters was conducted. The findings reveal that the productivity, competitive and comparative advantages were effectively synergized by focusing on external (non-economic) factors, such as: physical and psychological wellbeing of employees, buyer loyalty, quality of ancillary and supporting services, industry attitude, social responses, ethical supply sourcing, and organizational culture. Further, the success story of the apparel industry began when the journey was turned around from the brink of disintegration and collapse owing to the ingenuity of a few industry leaders who showed courage, innovativeness, and developed strategy to fight back as a collective body. However, there has not been an adequate support from policy establishments. The study envisages that the findings will be helpful for future developments in the apparel industry as well as for designing appropriate policies supporting the industry.